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Pclj Kicking the Habit Arguments for Abolishing Private Prison Contracts 2009

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Kicking the National Habit: The Legal and Policy
Arguments for Abolishing Private Prison Contracts
Lucas Anderson *





Historical Perspectives and the Growth of the Private Prison Industry
The Debate over Prison Privatization
Prison Administration Is an Inherently Governmental Function
Due Process Requirements and the Nondelegation Doctrine Forbid Private Prison
The Office of Management and Budget A-76 Circular and the Federal Acquisition
Regulation Prohibit Delegation of “Inherently Governmental Functions”
Delegating Prison Administration Is a Poor Policy Choice
The Profit Motive Detrimentally Impacts Inmate Care, Rehabilitation, and Criminal
Sentencing Policy
Cost-Cutting Measures Lead to Decreased Quality of Care
The Profit Motive Imposes Severe Social and Economic Costs
Harsh Criminal Laws Benefit the Private Prison Industry
Harsh Criminal Laws Do Not Reduce Crime Rates or Benefit Society
Effective Rehabilitation Programs Decrease Recidivisim Rates, Impacting
Private Prison Companies’ Revenue
The Purported Short-Term Economic Benefits of Prison Privatization Are Offset
by Long-Term Economic Costs
Statutory Prohibitions on Private Prison Contracts
Particularized Contract Terms and Aggressive Monitoring Programs Are Inviable
Alternative Solutions
Current Legislative Prohibitions on Government Contracts with Private Prison

* Lucas Anderson ( is a J.D. candidate at The George Washington University Law School
and a member of the Public Contract Law Journal. He wishes to thank Katherine Carroll, John Harrison, and Jessica
Tillipman for their invaluable insights and suggestions.
This article was originally published in the Public Contract Law Journal, a publication of the American Bar
Association, Vol. 39, No. 1 (Fall 2009). Copyright 2009, American Bar Association. All rights reserved. Printed in
the United States of America. Visit the Public Contract Law Journal at:
This information or any portion thereof may not be copied or disseminated in any form or by any means or
downloaded or stored in an electronic database or retrieval system without the express written consent of the
American Bar Association. This article is posted on PLN’s site with permission of the author and the ABA.



In recent decades, the incarceration rate in the United States has skyrocketed, presenting
serious fiscal challenges to local governments, states, and the Federal Government. 1 In less than
four decades, inmate populations have increased tenfold, from under 200,000 in 1971 to over 2
million in 2008. 2 The result—overcrowded prisons and jails—generates humanitarian, social,
and legal problems. The implications are equally as severe, if not more severe, than the
concomitant budgetary issues. 3 Many financially strained governments have found it necessary
to adopt innovative corrections policies to reduce the cost of prison administration. The
cornerstone of these efforts has been an increased dependency on contracts with private entities
for correctional and rehabilitative services. 4


54 (2008) (“State spending for corrections totaled $48.6 billion in fiscal 2007, a 9.7 percent increase compared to the
previous year . . . . Total state corrections spending is estimated to be $52.6 billion in fiscal 2008, 3.4 percent of total
state spending, and an estimated increase of 8.1 percent over the fiscal 2007 level.”); PUB. SAFETY PERFORMANCE
POPULATION 2007–2011, at 18–22 (2007) [hereinafter FORECASTING] (“[R]esearchers estimate that prison operating
costs will increase by at least $2.5 billion per year to as much as $5 billion per year by 2011.”).
See PEW CTR. ON THE STATES, ONE IN 100: BEHIND BARS IN AMERICA 5 (2008) [hereinafter BEHIND BARS] (noting
2,319,258 inmates were incarcerated at the beginning of 2008, approximately one for every 99.1 adults); John M.
Darley, On the Unlikely Prospect of Reducing Crime Rates by Increasing the Severity of Prison Sentences, 13 J.L. &
POL’Y 189, 190 (2005); see also Wray Herbert, Behind Bars: We’ve Built the Largest Prison System in the World.
Here’s a Look Inside, U.S. NEWS & WORLD REP., Mar. 23, 1998, at 11, 30 (“In 1971 the prison population was only
200,000, where it had hovered since the 1940s.”); Josh Margolin, The Lessons of Attica Thirty Years Later, The
Penal System Is Still in Need of Correction, NEWARK STAR-LEDGER, Sept. 9, 2001, at P1 (listing government
statistics, indicating that there were 198,061 incarcerated inmates in 1971).
See Jensen v. County of Lake, 958 F. Supp. 397, 406 (N.D. Ind. 1997) (dicta) (stating that prison overcrowding is
not per se unconstitutional under the Eighth Amendment, but may lead to dangerous conditions or deprivations of
essential sanitation or medical resources that would amount to cruel and unusual punishment); see also Prison
Litigation Reform Act of 1995, 18 U.S.C. § 3626(3)(e)(i) (2006)) (directing that a court shall enter a prisoner release
order where prison overcrowding is a primary cause of violation of an inmate’s federal right). In early 1985 many
states were under court order to find solutions to prison overcrowding. See Martin Tolchin, Companies Easing
Crowded Prisons, N.Y. TIMES, Feb. 17, 1985, § 1, at 29.
See, e.g., LA. REV. STAT. ANN. § 39:1800.2 (2009) (“The legislature hereby finds that . . . contracting for portions
of governmental services is a viable alternative considering the fiscal problems facing the state, in addition to the
interest on the part of many citizens in reducing the overall size of government.”); MONT. CODE ANN. § 53-30-601
(2008) (“It is the policy of the state of Montana to encourage innovative methods to provide the correctional
resources necessary to confine persons convicted of crimes. The state recognizes that there may be benefits to
confining convicted persons in private correctional facilities operated consistently with public policy.”).

Currently, the Federal Government and most states authorize corrections privatization in
some form. 5 Private prison contracts are intended to alleviate prison overcrowding and reduce
corrections expenditures while bypassing the need for bonds, increased taxes, or funding
referenda. 6 However, experience has shown that “the number of jailed criminals typically rises
to fill whatever space is available,” 7 and privatization has so far failed to temper prison
crowding. Instead, the consistent demand for new prisons and jails has facilitated an increase in
governmental spending, and corrections budgets continue to swell along with the prison
population. 8
Aside from its nonsuccess in improving crowded prison conditions, the privatization
“remedy” has created additional financial, legal, and moral problems. The first of these problems
relates to legitimacy. 9 When a private company assumes responsibility for the administration of
inmate punishment and rehabilitation, it improperly undertakes to perform an inherently public


The Federal Government and almost all of the states have either authorized private prison contracts by statute or
failed to expressly prohibit such contracts. See infra app. 1. But see Illinois Private Correctional Facility Moratorium
Act, 730 ILL. COMP. STAT. ANN. 140/1 to 140/4 (West 2009); N.Y. CORRECT. LAW §§ 120–121 (McKinney 2009).
See Tolchin, supra note 3 (quoting then-Senator Alphonse D’Amato (D-N.Y.): “[Prison privatization] certainly
could be used as a vehicle to circumvent the voting for bonds . . . .”). Widespread voter antipathy towards prison
construction bonds and increased taxes, along with the modern incarceration boom, have aggravated serried prison
conditions. See Richard Harding, Private Prisons, 28 CRIME & JUST. 265, 270 (2001) (“In many U.S. states,
governments reached their constitutional debt ceilings, with the consequence that additional capital expenditure on
infrastructure projects could only go ahead after voter approval for the issue of state bonds. Prisons were not high on
voters’ priority lists, and prison construction bond proposals were voted down. The point was reached where
politicians, valuing their political skins, were reluctant even to put up such proposals.”); see also Rachel Christine
Bailie Antonuccio, Note, Prisons for Profit: Do the Social and Political Problems Have a Legal Solution? 33 J.
CORP. L. 577, 579 (2008) (noting that during the late 1980s and 1990s, “state and federal legislators were
unreceptive to legislation involving new taxes and construction bonds, the most utilized methods of financing state
and local prisons”).
Ira P. Robbins, Privatization of Corrections: A Violation of U.S. Domestic Law, International Human Rights, and
Good Sense, 13 HUM. RTS. BRIEF 12 (2006). When prisons in a given jurisdiction reach critical levels of
overcrowding, prosecutors and sentencing judges may rely more on punishment or rehabilitation measures that do
not involve prison time. See Kerry L. Pyle, Note, Prison Employment: A Long-Term Solution to the Overcrowding
Crisis, 77 B.U. L. REV. 151, 159 (1997). However, when new prisons are built, temporarily relieving the
overcrowding situation, criminal defendants are again subject to harsh sentences until the newly built facility or
facilities are filled. See id.
Despite partial prison privatization in most states and at the federal level, corrections expenditures continue to
increase almost uniformly with increases in the prison population. FORECASTING, supra note 1, at iv. In 1980 total
national spending on corrections was approximately $9 billion. In 2005 total corrections spending had grown to over
$60 billion, with a projected increase of $27.5 billion by 2011. See id.
See Sharon Dolovich, State Punishment and Private Prisons, 55 DUKE L.J. 437, 441–42 (2005).

discretionary function at the expense of inmates’ fundamental liberty interests. 10 Another
problem stems from what private prison advocates claim to be privatization’s greatest virtue: the
free market model. Private prison companies and their supporters claim that competition and
market forces promote greater corrections service performance at a comparatively low cost and
that this benefit accrues to contracting governments. 11 However, these purported benefits are
often imperceptible and where they are evident they fail to justify the humanitarian and social
problems that arise under privatization schemes.
Privatization overall negatively impacts the treatment, rehabilitation, and care of
prisoners, indicating that the market-driven business model is fundamentally incompatible with
an effective and humane corrections system. 12 There are several reasons for this tension. First,
private prison companies are primarily profit-seeking entities, working to reduce costs wherever
possible. Cost-cutting measures promote inferior contract performance, undue safety risks, and
poor delivery of inmate services. 13 The profit motive also encourages private prison companies
to disregard the principles of inmate rehabilitation and criminal deterrence; if advanced, these
principles would undermine profits and reduce the demand for these companies’ services. 14
Finally, to expand their markets, private prison operators are exhorted to advance harsh criminal
sentencing policies and to dilute early-release, parole, and good-behavior programs within their


See id. (“Before seeking to ensure efficient incarceration, therefore . . . it must first be determined if the particular
penal practice at issue is even legitimate.”); see also 730 ILL. COMP. STAT. ANN. 140/1, 140/2 (“[T]he management
and operation of a correctional facility or institution involves functions that are inherently governmental.”).
In 1992 President George H. W. Bush issued Executive Order No. 12,803 encouraging state and local
governments to contract with the private sector because “private enterprise and competitively driven improvements
are the foundation of our Nation’s economy and economic growth.” 57 Fed. Reg. 19,063, 19,063 (Apr. 30, 1992);
(1998), available at
For extensive analysis of prison privatization and its effects on inmates, see ANDREW COYLE ET AL., CAPITALIST
PUNISHMENT (2003); Judith Greene, Bailing Out Private Jails, 12 AM. PROSPECT 23, Sept. 2001, at 23, 23; and
Robbins, supra note 7.
See COYLE ET AL., supra note 12, at 39–74; Greene, supra note 12, at 23–24; Robbins, supra note 7.
See COYLE ET AL., supra note 12, at 48–55; Robbins, supra note 7, at 12, 14; see also Senator Seeks End to
Privately Run Prisons, 7 FED. HUM. RESOURCES WK. 23, Sept. 25, 2000 (quoting Sen. Russell Feingold: “The profit
motive clearly has a dangerous and harmful effect on the security of private prisons, but the profit motive also
shortchanges the inmates of the rehabilitation, education and training they need.”).

facilities. 15 All of these market-based incentives, as applied to the field of corrections, operate to
the detriment of the Government, prison inmates, and society as a whole. 16
In Illinois and New York, legislators have rightfully abolished private prison contracts. 17
This Note will detail why the Federal Government and all other states should follow suit and
avoid further abdications of prison administration responsibilities for the sake of short-term
financial savings. Part II will discuss the history and development of private prisons in the
United States, accounting for the recent surge in incarceration rates and the impetus behind the
modern privatization trend. Part III will argue that prison privatization improperly and illegally
encroaches on inherently governmental functions, and that it is fundamentally incompatible with
the goals of an effective and humane penal system. Part IV will recount and analyze various
problems unique to private prisons, concluding that these problems far outweigh the purported
benefits associated with outsourcing. Finally, Part V will address the measures New York and
Illinois have adopted to avoid the problems associated with private prisons. It also will discount
contract modification as a viable alternative solution. This Part will conclude that the Federal
Government and those states that continue to outsource prison administration must reclaim their
inherently governmental responsibilities and enact legislation prohibiting all private prison
administration contracts.


INCARCERATION BOOM vii (2000) (discussing the efforts made by private prison companies to encourage strict
criminal sentencing legislation).
COYLE ET AL., supra note 12, at 54.
Illinois Private Correctional Facility Moratorium Act, 730 ILL. COMP. STAT. ANN. 140/1 to 140/4 (West 2009)
(“[T]he State shall not contract with a private contractor or private vendor for the provision of services relating to
the operation of a correctional facility or the incarceration of persons in the custody of the Department of
Corrections . . . .”); N.Y. CORRECT. LAW §§ 120–121 (McKinney 2009) (“[T]he private operation or management of
a correctional facility . . . is prohibited.”).


Historical Perspectives and the Growth of the Private Prison

The modern prison privatization trend has significant historical precedent. State and local
governments have contracted with private entities to administer various aspects of penal
administration since the early colonial days. 18 In the eighteenth and nineteenth centuries, many
private businesses employed prisoners as a source of cheap manual labor. 19 Inmate labor
practices continued until the early twentieth century, despite a troubling pattern of prisoner
abuses that arose under the watch of private prison companies. 20 By the 1920s, for-profit prison
labor programs were largely eradicated in response to protests from labor reform advocates and
claims from competing industries that prison labor constituted unfair competition. 21
In the 1970s and 1980s, private interests once again assumed control of various prison
administration functions. 22 This re-privatization began as a piecemeal shift involving inmate
food and medical care services, but quickly accelerated to the point where the Federal Bureau of
Prisons and some states were outsourcing operations functions for entire jails and prisons. 23 In


PRISONS 9–13 (2001); Nicole B. Casarez, Furthering the Accountability Principle in Privatized Federal
Corrections: The Need for Access to Private Prison Records, 28 U. MICH. J.L. REFORM 249, 252 (1995).
See AUSTIN & COVENTRY, supra note 18, at 10–11; Casarez, supra note 18, at 252.
See AUSTIN & COVENTRY, supra note 18, at 11; 3 MICHAEL B. MUSHLIN, RIGHTS OF PRISONERS § 17:2 (3d ed.
See AUSTIN & COVENTRY, supra note 18, at 11; Casarez, supra note 18, at 253. Modern prison labor programs in
public facilities are generally viewed as rehabilitative, vocational-training measures, rather than a source of revenue
for private business. See FAR 8.601(b). Under FAR 8.602, the Government must give preference to products made
by prisoners (under a public entity known as Federal Prison Industries (FPI)) if such goods are comparable to those
available from the private sector and if they “best meet the [G]overnment’s needs in terms of price, quality, and time
of delivery.” Arguments against this preference policy are similar in substance to those levied at the private prison
labor programs during the early twentieth century. See, e.g., Press Release, Rep. Peter Hoekstra, House Passes FPI
Reform Legislation (Sept. 14, 2006), available at (“Fundamental reform of FPI is simply
an issue of fairness. Private sector firms and their law-abiding workers should have the opportunity to compete for
contracts they fund with their tax dollars.”).
See Casarez, supra note 18, at 253–54.
See AUSTIN & COVENTRY, supra note 18, at 12; Casarez, supra note 18, at 254.

1984, Corrections Corporation of America (CCA), currently the largest private prison contractor
in the United States, 24 contracted with the state of Tennessee to run its Hamilton County
facility. 25 Since then, the private prison industry has grown considerably, operating prisons,
juvenile centers, and other correctional facilities under contract with the Federal Government and
many state and local governments. 26 By 1996, thirteen states had outsourced some portion of
their penal systems 27 and by 2004, thirty-four states had embraced the privatization trend. 28
Despite considerable skepticism from legal and policy commentators and evidence that the
purported benefits of privatization are generally unavailing, 29 only New York and Illinois have
enacted legislation expressly barring private prison contracts. 30
The recent surge in corrections privatization is largely a product of the Government’s
choice to build new facilities to accommodate large inmate populations, rather than address the
root causes of overcrowding. 31 Drastic rises in incarceration rates are attributable not to
increased criminal activity—as indicated by statistics demonstrating that property and violent


See Corrections Corp. of America Names New President, Chairman, NASHVILLE BUS. J., July 24, 2008, available
at Corrections Corporation of America
(CCA) continues to perform well, with a 16% increase in fourth-quarter earnings between 2007 and 2008, due in
part to a 4.1% increase in inmates and a 5.2% increase in per-diem rates charged to the Government. See CCA Halts
Construction of Trousdale Prison, NASHVILLE BUS. J., Feb 11, 2009, available at
At one point, CCA unsuccessfully attempted to contract for the administration of Tennessee’s entire penal system
for over $200 million. See Eric Bates, Private Prisons, NATION, Jan. 15, 1998, at 11.
See Stephanie Chen, Larger Inmate Population Is Boon to Private Prisons, WALL ST. J., Nov. 19, 2008, at A4
(asserting that in 2007, private prisons housed approximately 7.4% of all state and federal prisoners).
James Blumstein et al., Do Government Agencies Respond to Market Pressures? 15 VA. J. SOC. POL’Y & L. 446,
454 (2008).
See id.
INCARCERATION 5, available at (last
visited Aug. 23, 2009) (arguing that “[c]laims of significant cost-savings and improved efficiency from private
prisons have not proven true”); WESTERN PRISON PROJECT, supra note 15; Casarez, supra note 18 (addressing the
lack of accountability and oversight in private prisons); Dolovich, supra note 9; Robbins, supra note 7; Douglas W.
Dunham, Note, Inmates’ Rights and the Privatization of Prisons, 86 COLUM. L. REV. 1475, 1475 (1986) (calling for
comprehensive safeguards to protect inmates’ constitutional rights in private prisons); Greene, supra note 12.
See infra app. 1.
See Greene, supra note 12 (“For close to a decade, [private prison] business boomed and its stock prices soared
because state legislators across the country thought they could look both tough on crime and fiscally conservative if
they contracted with private companies to handle the growing multitudes being sent to prison under new, more
severe sentencing laws.”).

crime rates have generally fallen since the early 1970s 32 —but rather to various items of “get
tough” legislation at the federal and state levels, such as minimum mandatory sentencing
guidelines, 33 three-strikes laws, 34 and the War on Drugs. 35 Thanks largely to these measures,
there are currently over 2.3 million Americans behind bars, accounting for approximately one
percent of adult Americans. 36 Instead of repealing ineffective and costly criminal laws, which
may be a politically unpopular solution, many lawmakers continue to support new prison
construction as a means to accommodate the influx of prisoners convicted and sentenced under
these draconian measures. 37


See Bureau of Justice, U.S. Dep’t of Def., Bureau of Justice Statistics—Property Crime Rates Continued
to Decline, (last visited Aug. 23, 2009); Bureau of Justice,
U.S. Dep’t of Def., Bureau of Justice Statistics—Serious Violent Crime Levels Declined Since 1993, (last visited Aug. 23, 2009). Federal Bureau of Investigation
statistics also indicate a continuing general downward trend in violent crime and property crimes. See U.S.
(2009), available at (“Preliminary figures indicate that, as a
whole, law enforcement agencies throughout the Nation reported a decrease of 3.5 percent in the number of
violent crimes brought to their attention for the first six months of 2008 when compared with figures
reported for the same time in 2007 . . . . The number of property crimes in the United States from January
to June of 2008 decreased 2.5 percent when compared with data from the same time period in 2007.”).
See Marie Gottschalk, Dismantling the Carceral State: The Future of Penal Policy Reform, 84 TEX. L. REV. 1693,
1716–17 (2006) (“The extent of the U.S. carceral state continues to dwarf the imprisoned population of Europe . . . .
European countries have resisted adopting legally binding sentencing guidelines like those widely used in the United
See generally Michael Vitello, Three Strikes: Can We Return to Rationality? 87 J. CRIM. L. & CRIMINOLOGY 395
See, e.g., Gottschalk, supra note 33, at 1737 (“In the 1980s, about two-thirds of the growth in incarceration was
attributed to locking up more non-violent offenders, notably substance abusers.”); Robert G. Lawson, Difficult
Times in Kentucky Corrections—Aftershocks of a “Tough on Crime” Philosophy, 93 KY. L.J. 305, 351 (2005)
(“Since 1980, the number of drug offenders in state prisons has increased thirteen-fold, and drug offenses comprise
one-fifth of all state prisoners. Most of these persons are not high-level actors in the drug trade, and most have no
prior criminal record for a violent offense.”).
BEHIND BARS, supra note 2.
Lawson, supra note 35, at 318–19 (“The label ‘penal populism’ has been used by some authorities to
describe the country’s turn toward punitive penology. It reared its head when rehabilitation began to lose
supporters, was never presented ‘as a package for public debate,’ gained unstoppable momentum during the
last two decades of the twentieth century, and has only recently shown some signs of exhaustion. It
deserves most of the credit, or most of the blame, for a criminal justice system that has ‘produced a wave of
building and filling prisons virtually unprecedented in human history,’ and for rates of incarceration that
qualify as disgraceful when measured against world standards.”) (quoting Marie Gottschalk, Black Flower:
Prisons and the Future of Incarceration, 582 ANNALS AM. ACAD. POL. & SOC. SCI. 195, 196, 198 (2002),

An expanding carceral system requires difficult budgetary choices. 38 However,
contracting with the private sector to not only build, but also administer, prison facilities allows
the Government to address the overcrowding problem, without facing the politically unpopular
specter of prison bonds or tax increases. In the long run, this short-term fix only aggravates
governmental corrections expenditures and creates additional economic and social problems.


The Debate over Prison Privatization
Compelling arguments against private prisons are abundant. Privatization critics argue

that prison administration is a discretionary function that should only be performed by public
actors. 39 These critics note that, because prison managers and guards exercise considerable
discretion over matters relating to inmate life, liberty, and property, the private exercise of this
discretion is morally problematic and inconsistent with legal and constitutional prohibitions on
the delegation of inherently governmental activities. 40
Privatization critics also note that the profit-based business model encourages private
prison operators to minimize expenditures for inmate services and prison staffing, thereby
impairing safety and undermining prisoners’ basic human rights. 41 Finally, privatization critics
argue that because private prison companies generate revenue on a per-prisoner, per-diem rate,
they have an incentive to encourage high recidivism rates and lengthy prison sentences. 42 This
incentive manifests itself in the decision by the private prison companies to eschew rehabilitation
programs and to lobby in favor of harsh criminal sentencing measures. Such critiques of the


See supra note 1 and accompanying text. Often, voters must approve bonds to finance new prisons, and these
measures are frequently rejected. See supra note 6 and accompanying text.
See, e.g., Robbins, supra note 7; Warren L. Ratliff, Note, The Due Process Failure of America’s Prison
Privatization Statutes, 21 SETON HALL LEGIS. J. 371, 373 (1997).
See, e.g., Robbins, supra note 7; Shymeka L. Hunter, Note, More Than Just a Private Affair: Is the Practice of
Incarcerating Alaska Prisoners in Private Out-of-State Prisons Unconstitutional? 17 ALASKA L. REV. 319 (2000);
Ratliff, supra note 39.
See, e.g., COYLE ET AL., supra note 12, at 39–47; Robbins, supra note 7, at 12–15.
See, e.g., SENTENCING PROJECT, supra note 29, at 4; Robbins, supra note 7, at 12, 15.

privatization trend all share in common the understanding that a for-profit private business model
is fundamentally incompatible with the purposes and goals of an effective and humane penal
Supporters of prison privatization argue that market-based competition provides a benefit
to the Government and to the field of corrections because it encourages superior contract
performance and the development of innovative practices.43 Privatization supporters claim that
by reducing bureaucracy and by competing with other firms for contracts, private prison
companies perform corrections services at a higher standard and at a cheaper rate. 44 Privatization
supporters argue that allegations of poor safety records, inmate mistreatment, and a lack of
accountability in private prisons are unfounded or exaggerated, and that competition among
corrections service providers generates long-term benefits to public and private carceral
institutions. 45
Unfortunately, experience has shown that the purported benefits are logically and
empirically unfounded. Far from promoting cost-effective and competitive 46 practices, the
problems arising under prison privatization generate various indirect financial costs, and
detrimentally affect inmate treatment, care, and rehabilitation. 47


See, e.g., MOORE & ROSE, supra note 11, at 17; Blumstein et al., supra note 27, at 452.
See MOORE & ROSE, supra note 11, at 17; Blumstein et al., supra note 27, at 449 n.14;, True
Facts About Corrections Corporation of America (CCA) and Privatization,
(last visited Aug. 23, 2009) [hereinafter Facts About Privatization] (“Given state or federal governments’ ability to
cancel contracts with private companies if standards are not met, private operators are accountable for their
operations in ways that public systems are not.”).
See Facts About Privatization, supra note 44.
The private prison industry is largely an oligopoly, dominated by a few firms, and therefore the idea that market
competition will encourage greater performance is tenuous at best. See Alfred C. Aman Jr., Privatization, Prisons,
Democracy, and Human Rights: The Need to Extend the Province of Administrative Law, 12 IND. J. GLOBAL LEGAL
STUD. 511, 536 (2005). Concentration of the “market” in relatively few companies is likely to remain at present
levels or even increase, given the effects of long-term contracts allowed by many of the enabling state statutes. Id.
See COYLE ET AL., supra note 12; Robbins, supra note 7, at 12–15; Greene, supra note 12.

Delegating public responsibilities for inmate treatment and rehabilitation to private
businesses implicates a concern that “governmental power—power coercive in nature—will be
used to further the private interests of the private actor, as opposed to some different public
interest.” 48 Assigning the duties of inmate care—including the provision of food, clothing,
sanitary supplies, medical care, and disciplinary authority—to profit-seeking entities entails
obvious legal and moral questions. The constitutional doctrine of nondelegation prohibits the
Government from assigning certain functions to financially interested private actors. 49 Similarly,
the Federal Acquisition Regulation (FAR) and the Office of Management and Budget’s revised
A-76 Circular also protect certain “inherently governmental functions” from privatization. 50
Under these legal guidelines, prison administration—a discretionary duty that directly impacts
inmates’ liberty—may not be outsourced to the private sector.


Due Process Requirements and the Nondelegation Doctrine

Forbid Private Prison Administration
Incarceration, which renders every aspect of prisoners’ physical and mental health,
safety, education, and socialization subject to the control of prison guards and their superiors,
directly affects inmate liberty interests. 51 The Supreme Court has found that under the Due
Process Clauses of the Fifth and Fourteenth Amendments, the Government may not delegate


David M. Lawrence, Private Exercise of Governmental Power, 61 IND. L.J. 647, 659 (1986).
See Tumey v. Ohio, 273 U.S. 510, 510 (1926).
FAR 7.503(a) (“Contracts shall not be used for the performance of inherently governmental functions.”); Revision
to Office of Management and Budget Circular No. A-76, 68 Fed. Reg. 32,134, 30,138 (May 29, 2003) (“Inherently
governmental activities must be performed by public employees.”).
“Incarceration is among the most severe and intrusive manifestations of power the state exercises against its own
citizens. When the state incarcerates, it strips offenders of their liberty and dignity and consigns them for extended
periods to conditions of severe regimentation and physical vulnerability.” Dolovich, supra note 9, at 441.

discretionary governmental functions to private entities with a financial stake in the way such
discretion would be applied. 52 The controls exercised by prison employees are inherently
discretionary and the manner in which they are applied cannot be influenced by the pecuniary
aims of the operator without offending prisoner due process rights. Like their public
counterparts, private prison guards are often called upon to decide appropriate punishments for
inmate misconduct. 53 Many of these guards have stock in their employer-company or receive
some other profit-sharing benefits, 54 giving them a direct interest in the outcome of their
professional decisions. Thus, they benefit when prisoner sentences are lengthened and their
good-time credits reduced. 55 This conflict, unique to private prisons, is illustrative of why
certain quasi-judicial functions are nondelegable under due process requirements. 56


See A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 537 (1935) (“But would it be seriously
contended that Congress could delegate its legislative authority to trade or industrial associations or groups so as to
empower them to enact the laws they deem to be wise and beneficent for the rehabilitation and expansion of their
trade or industries? . . . The answer is obvious. Such a delegation of legislative power is unknown to the law . . . .”);
Tumey, 273 U.S. at 523 (“[I]t certainly violates the Fourteenth Amendment, and deprives a defendant in a criminal
case of due process of law, to subject his liberty or property to the judgment of a court the judge of which has a
direct, personal, substantial, pecuniary interest in reaching a conclusion against him in his case.”).
See Harding, supra note 6, at 276.
See Aman, supra note 46, at 541.
(“The New Mexico Corrections Department found that inmates at the CCA facility lost ‘good time’ eight times more
frequently than prisoners in a state institution . . . . In Tennessee, CCA guards say privately that they are encouraged
to send balky inmates to administrative segregation; by placing prisoners in the ‘hole,’ the company earns an extra
$1,000 because 30 days are added to the sentence.”). Many states’ enabling statutes forbid private prison companies
from calculating sentence credits without governmental oversight. See, e.g., COLO. REV. STAT. ANN. § 17-1203(1)(d) (West 2008); ARIZ. REV. STAT. ANN. § 41-1609.01(P)(2) (2009). However, these clauses cannot
effectively prevent private companies from exercising undue influence over inmates’ liberty; without a constant,
omniscient governmental presence within prisons, there is no way to ensure that private interests do not influence
decisions affecting inmates’ punishments or rewards. See Dolovich, supra note 9, at 492.
Cf. Carter v. Carter Coal, 298 U.S. 238, 311–12 (1936) (“[I]n the very nature of things, one person may not be
entrusted with the power to regulate the business of another, and especially of a competitor. And a statute which
attempts to confer such power undertakes an intolerable and unconstitutional interference with personal liberty and
private property. The delegation is so clearly arbitrary and so clearly a denial of rights safeguarded by the due
process clause of the Fifth Amendment that it is unnecessary to do more than refer to decisions of this court which
foreclose the question.”) (citing A.L.A. Schechter Poultry Corp., 295 U.S. at 537).


The Office of Management and Budget A-76 Circular and the

Federal Acquisition Regulation Prohibit Delegation of “Inherently
Governmental Functions”
In 1966 the Office of Management and Budget published Circular A-76, providing that
federal agencies must rely on private sector sources for service provision when it is cost-effective
and would not adversely impact governmental operations. 57 Several exceptions to this policy
apply, including instances where no satisfactory commercial source is available for a particular
service, where in-house performance would cost less than outsourcing, or where the service
requires an exercise of discretion in applying governmental authority. 58 The Federal Activities
Inventory Reform Act of 1998 revised the A-76 process and defined “inherently governmental
functions” as “activities that require the exercise of discretion in applying Federal Government
authority.” 59 Thus, inherently governmental functions were specifically excluded from the A-76
policy of private sector source preference. 60
Relevant sections of the FAR also prohibit delegations of certain governmental
functions. 61 Under the FAR, an “inherently governmental function” is defined as
a function that is so intimately related to the public interest as to mandate
performance by Government employees . . . . An inherently governmental
function includes activities that require either the exercise of discretion in
applying Government authority, or the making of value judgments in making
decisions for the Government . . . . An inherently governmental function involves,
among other things, the interpretation and execution of the laws of the United

Office of Management and Budget, Circular A-76, Performance of Commercial Activities (1966), amended by 61
Fed. Reg. 14,338 (Apr. 1, 1996), further amended by 68 Fed. Reg. 32,134 (May 29, 2003).
31 U.S.C. § 501 (2006).
61 Fed. Reg. at 14,340 (Apr. 1, 1996) (“Inherently governmental functions are not commercial in nature, are not
subject to the Circular and cannot be converted to contract performance.”).
FAR 7.503(a).

States so as to . . . (iii) Significantly affect the life, liberty, or property of private
persons. 62
In the course of their duties, prison employees frequently decide whether to administer
punishment in response to inmate misconduct. Procurement regulations rightfully require such
quasi-judicial decisions, which affect the “life, liberty, or property of private persons,” 63 to be
made by governmental actors. 64 Only the Government may legitimately decide, for example,
whether an inmate is up for parole or eligible for a sentence reduction because of good behavior.
Likewise, the decision whether to apply corporal punishment or to cite an inmate for
misbehavior is a decision “intimately related to the public interest” that “significantly affect[s]
the life, liberty, or property of private persons.” 65 These discretionary duties are clearly within
the ambit of Circular A-76 and the FAR definitions of “inherently governmental function[s].” As
such, they are protected from private sector delegation.


Delegating Prison Administration Is a Poor Policy Choice
The argument against prison privatization as a policy matter is clear. Outsourcing

decisions over matters with drastic and irreversible implications for inmates’ lives to profitseeking businesses with an interest in minimizing expenditures and maximizing punishment is
immoral and incompatible with fundamental notions of justice. Illinois lawmakers have barred
private prison contracts within their state, finding that the “management and operation of a
correctional facility or institution involves functions which are inherently governmental.” 66
After experimenting with the privatization “solution” for several years, New York State also

FAR 2.101.
Cf. Memorandum from Amy L. Comstock, Dir. of the Office of Gov’t Ethics, to Designated Agency Ethics
Officials, Regarding Inherently Governmental and Commercial Ethics Official Activities 1, 4, 5 (June 30, 2003),
available at (concluding that essential
activities performed by ethics officials are inherently governmental for purposes of A-76 requirements).
FAR 2.101.
730 ILL. COMP. STAT. ANN 140/1 to 140/4 (West 2009).

enacted its own statutory prohibition on private prison contracts, agreeing with Illinois that
“coercive police powers” are “distinguishable from privatization in other areas of
government.” 67 At the federal level, Senator Russell Feingold (D-Wis.) and Representative Ted
Strickland (D-Ohio) recognized the detrimental effects of private prisons and, in 2001,
introduced the Public Safety Act, which sought to not only prohibit federal contracts with private
prison companies, but also to eliminate certain federal grants to states using private prisons. 68 In
support of this bill, Senator Feingold correctly noted that prison administration functions “should
not be delegated to a private company that is not accountable to the people.” 69 To legitimize
corrections and rehabilitation functions, it is imperative that Congress and the states follow the
example set by Illinois and New York by enacting complete prohibitions on all prison
privatization contracts.

Private prison companies operate under a profit motive, which encourages minimal
spending for inmate services, support of harsh criminal penalties, and a dearth of effective


S. 842, 107th Cong. § 2(9) (2001); H.R. 1764, 107th Cong. § 2(9) (2001) (“The imposition of punishment on
errant citizens through incarceration requires State and local governments to exercise their coercive police powers
over individuals. These powers, including the authority to use force over a private citizen, should not be delegated to
another private party.”). The Public Safety Act was referred to the Senate Judiciary Committee and the House
Subcommittee on Crime; no further action was taken. See S. 842.
Senator Seeks End to Privately Run Prisons, supra note 14.
This Note does not defend the record of federal, state, and local governments in terms of public penal
administration. The gross human rights and civil rights violations that occur in prisons are by no means limited to
the private sphere. “[C]onditions in many prisons—public and private alike—fall far short of satisfying society’s
obligations to those it incarcerates.” Dolovich, supra note 9, at 442. However, to reform prison policy and
administration overall, it is imperative that private actors with a financial stake in maintaining high incarceration
rates and lengthy criminal sentences do not improperly influence the formation of policies that instead ought to serve
the public interest.

rehabilitation programs in the facilities they operate. 71 These perverse incentives, which are
empirically palpable, further support the contention that a for-profit business model is
incompatible with effective and humane prison administration.


Cost-Cutting Measures Lead to Decreased Quality of Care
To increase profit margins, many private prison companies implement cost-cutting

measures that detract from essential inmate services. These service impairments frequently lead
to foreseeable yet tragic situations. 72 “[T]he private sector is a more dangerous place to be
incarcerated” 73 partially because private prison companies often accede to their profitmaximizing incentive at the expense of safety interests and prisoners’ basic human rights.
In comparison to their public counterparts, private prison guards receive lower pay and
fewer benefits. 74 This leads to high turnover among private correctional officers, meaning that at
any given time there are more guards in private prisons who are new to their facility or to the
field of corrections in general than in public prisons. 75 Private prison guards receive thirty-five
percent fewer service training hours than public prison employees. 76
The implications for safety under these policies are obvious. For example, it was found
that guards in a private facility in Ohio had not received weapons training although they were
instructed to carry firearms while on patrol. 77 In a private Texas facility, “guard training”


See COYLE ET AL., supra note 12; WESTERN PRISON PROJECT, supra note 15; Robbins, supra note 7 (“Critics argue
that as a matter of policy it is inappropriate to operate prisons with a profit motive, which provides no incentive to
reduce overcrowding (especially if the company is paid on a per-prisoner basis), to consider alternatives or to deal
with the broader problems of criminal justice.”).
See, e.g., COYLE ET AL., supra note 12, at 30–37; Greene, supra note 12, at 23–24.
Curtis R. Blakely & Vic W. Bumphus, Private & Public Sector Prisons—A Comparison of Select Characteristics,
68 FED. PROBATION 27, 30 (2004).
See Low Wages Incite COs to Size Up Their Jobs: Earnings, Especially at Private Prisons, Hover at Poverty Line,
CORRECTIONS PROF., Nov. 19, 1999, at 10.
See Blakely & Bumphus, supra note 73, at 29 (stating that in 1998 private prisons experienced turnover rates
almost three times higher than public prisons).
See Robbins, supra note 7, at 13; see also Blakely & Bumphus, supra note 73, at 29.
See COYLE ET AL., supra note 12, at 33.

seminars consisted of watching videos in which prisoners were beaten, stun-gunned, stripped
naked, and subjected to unleashed dogs. 78
The most effective means of lowering prison operating costs is to ensure that the ratio of
prisoners per guard is as high as possible. 79 On average, private prisons employ fifteen percent
fewer guards per prisoner than public prisons, 80 a policy that places both guards and inmates at
an increased risk of danger. In 2005, after an inmate riot in a private Colorado facility where
thirteen correctional officers were injured, a state investigation found that there were only thirtythree officers overseeing 1,100 inmates when the riot began. 81
The gravity of the profit incentive is manifest in many other dangerous and inhumane
cost-saving practices adopted by private prison operators. For example, in Youngstown, Ohio, a
medium-security prison operated by CCA was found to have reclassified maximum-security,
high-risk prisoners arriving from Washington, D.C., as medium-security inmates to avoid
incurring costs associated with raising the security level of the prison. 82 Within the next eighteen
months, two Youngstown inmates were stabbed to death and forty-four other assaults were
recorded. 83 In a private facility in Elizabeth, New Jersey, it was found that cost-cutting measures
led to serious shortages of food and sanitary supplies and the prisoners were routinely abused by
the staff. 84 In 2001, a Department of Justice study found sixty-five percent more inmate-oninmate assaults and forty-nine percent more inmate-on-staff assaults in private facilities than in


See Blakely & Bumphus, supra note 73, at 29.
See id. (“[T]he private sector reports an average 6.7 inmates per correctional officer and 3.7 inmates per staff
member. The public sector, in comparison, reported an average 5.6 inmates per correctional officer and 3.1 inmates
per staff member.”); Robbins, supra note 7, at 13.
See CCA Bids on Colorado Contracts, CORRECTIONS PROF., Mar. 24, 2006, at 15.
supposed to accept maximum-security inmates. But when they arrived, CCA did not object” because doing so would
have cost the company $14,659 per day in lost revenue.).
For more information on the conditions at Youngstown, see Mark Tatge, Employees Criticize Privately Run
Facilities, CLEV. PLAIN DEALER, Aug 30, 1998, at 18A, and Cheryl W. Thompson, Ohio Issues Restraining Order
for Prison Firm, WASH. POST, Nov. 19, 1998, at B4.
See Dolovich, supra note 9, at 498.

government-operated prisons. 85 This trend is especially significant considering that private
prisons are generally used to house inmates from lower security classifications. 86 As an
inevitable product of private prison companies’ cost-cutting incentives, these findings further
demonstrate that the for-profit private business model is incompatible with safe and effective
prison administration.


The Profit Motive Imposes Severe Social and Economic Costs


Harsh Criminal Laws Benefit the Private Prison Industry
The growth of private prison companies depends on rising incarceration rates and strict

criminal sentencing laws. 87 As “clients” of the private prison system, inmates are the main
source of revenue to the companies responsible for their treatment and rehabilitation. To generate
steady profits, these companies require a continual supply of new clients (first-time convicts) and
a base of frequent, dependable clients (recidivist convicts). Fortunately for the private prison
industry, these twin goals have been made possible by high criminal recidivism rates 88 and the
widespread adoption of “get tough” mandatory sentencing laws. 89
Private prison companies are not simply passive recipients of these windfall-generating
phenomena. Instead, recognizing the benefits they receive from strict sentencing laws and high
recidivism rates, they actively seek to ensure that these trends continue despite harmful effects


AUSTIN & COVENTRY, supra note 18, at 48; Fox Butterfield, Justice Dept. Shows Trouble in Private U.S. Jails
Preceded Job Fixing Iraq’s, N.Y. TIMES, June 6, 2004, at A18.
See Dolovich, supra note 9, at 503.
In their March 1997 filing with the Securities and Exchange Commission, CCA noted that “the rate of
construction of new facilities and the Company’s potential for growth will depend on a number of factors, including
crime rates and sentencing patterns in the United States.” SENTENCING PROJECT, supra note 29, at 4.
A study of individuals released from prison in 1994 found that 67.5% were rearrested within three years. BUREAU
(2002), available at
See NAT’L CRIMINAL JUSTICE COMM’N, THE REAL WAR ON CRIME 13–15 (Steven R. Donzinger ed., 1996)
(detailing anticrime legislative enactments in the 1980s and 1990s); Darley, supra note 2, at 190–91; Gottschalk,
supra note 33; Lawson, supra note 35; Vitello, supra note 34; Hunter, supra note 40, at 322–23.

on the inmates, the Government, and society as a whole. 90 Lobbying efforts, both direct and
indirect, reflect private prison companies’ policy preferences in terms of criminal sentencing
measures. 91 The private prison lobby is active at the federal level and in many states, bankrolling
favorable candidates’ political campaigns and supporting “think tank” policy initiatives. 92 For
example, during the 1998 election cycle, private prison companies contributed more than
$540,000 to 361 candidates in twenty-five states, eighty-seven percent of whom won their
elections. 93 In 2000, approximately forty percent of state legislators were members of the
American Legislative Exchange Council (ALEC), a policy advocacy group that promotes model
legislation such as minimum mandatory sentencing requirements and three-strikes, habitual
offender statutes. 94 ALEC receives the majority of its funding from corporate interests, including
large contributions from private prison companies such as CCA. 95
Aside from these traditional advocacy methods, some private prison companies have
pursued underhanded and illegal tactics in their attempts to influence lawmakers. In 2003, a
probe by the New York State Lobbying Commission found that Correctional Services
Corporation (CSC) had illegally provided free chauffer-driven transportation to several state
lawmakers for at least a four-year period. 96 In Alaska, the founder of several private halfway

See WESTERN PRISON PROJECT, supra note 15 (“[A] major factor in the current incarceration boom is the influence
of private prison corporations with vested financial interests in increasing rates of imprisonment.”).
See id.
See id.
Id. at 8–9. Wackenhut Corrections Corporation, which operates several private prisons in California, contributed
$53,000 to Governor Arnold Schwarzenegger’s 2003 gubernatorial campaign, during a time when its Central Valley,
California, prison was slated to be closed at the end of that year. Schwarzenegger Takes Donation from Florida
Prison Firm, CORRECTIONS PROF., Dec. 12, 2003, at 15. CCA, which was awarded contracts by the state of
Kentucky, contributed $10,000 to a private fund to pay for repairs to the Kentucky governor’s mansion. Private
Prison Company Donated to Governor’s Mansion Fund, CORRECTIONS PROF., May 27, 2005, at C1. The GEO
Group, which operates private prisons in New Mexico, contributed more than $40,000 to New Mexico Governor
Bill Richardson’s 2006 reelection campaign and an additional $15,000 for his January 2007 inauguration. Steve
Terrell, Roundhouse Roundup: Richardson Donor List Has Familiar Look, SANTA FE NEW MEXICAN, Aug. 9, 2007,
at C1.
See WESTERN PRISON PROJECT, supra note 15, at 3.
Id. at 3–4.
CSC Probed for Favors to N.Y. Legislators, CORRECTIONS PROF., Feb. 14, 2003, at 10; James C. McKinley Jr.,
Company Gets Record Fine for Its Giving to Lawmakers, N.Y. TIMES, Feb. 27, 2003, at B1. In 2007, having
experienced the problems inherent in prison privatization, New York enacted N.Y. CORRECT. LAW §§ 120–121
(McKinney 2009), prohibiting government contracts with private prison providers.

houses was recently sentenced to six months in federal prison for paying a legislative candidate
at least $20,000 to support construction of a new private facility in the state. 97
Instances of self-serving bribery are not limited to schemes that seek to affect broad
policy change or embed a general preference for corrections privatization. In early 2009, it was
discovered that a private juvenile detention center paid two Pennsylvania judges $2.6 million
over five years to reject pleas for leniency and alternative punishments for hundreds of teens.98
In exchange, the local public facility was shut down by one judge, who controlled the budget,
and the teens were then sentenced by the other judge to serve time in PA Child Care, a private
company’s facility. 99 Although these accounts do not reflect the bulk of the private prison
industry’s lobbying efforts, they are not extraordinarily rare. 100 The tensions between private
prison companies’ financial interests and legitimate penal functions are evident. The financial
success achieved by private prison companies comes at a steep cost to the inmates, their families,
the Government, and society as a whole.


Harsh Criminal Laws Do Not Reduce Crime Rates or Benefit

Available evidence largely refutes the contention that tough criminal measures benefit
society by reducing crime rates and deterring criminals. 101 Removing criminal offenders—many
of whom are imprisoned for drug charges or other nonviolent offenses—from society for long


Lisa Demer, Weimar Sentenced to Six Months, ANCHORAGE DAILY NEWS, Nov. 13, 2008, at A1.
John Schwartz, Slates Cleaned for Youths Sentenced Fraudulently, N.Y. TIMES, Mar. 27, 2009, at A13.
Id. When the corruption came to light, the judges were sentenced to eighty-seven months in federal prison. The
teens who had been sentenced by them were released, and their records were expunged. Id.
See, e.g., Greene, supra note 12 (“[I]n Oklahoma, the addiction treatment manager at CCA’s Tulsa Jail resigned.
The warden, she said, had directed her to make a ‘sales pitch’ to local judges, urging them to sentence offenders to a
treatment program in the jail even though the program had been eviscerated in order to cut operating expenses.”).
See David Anderson, The Deterrence Hypothesis and Picking Pockets at the Pickpocket’s Hanging, 4 AM. L. &
ECON. REV. 295, 302–04 (2002) (finding that the vast majority of violent offenders are not deterred or influenced
by, or are unaware of, existing punishments for their crimes); Darley, supra note 2, at 193–95.

periods of time and placing them in crowded, dangerous, and unhealthy conditions with other
criminals often has negative aggregate effects on recidivism rates. 102
Lengthy prison sentences impair inmates’ ability to obtain legitimate employment once
they are released, increasing their incentive to revert to criminal behavior. 103 Long periods of
incarceration weaken inmates’ family ties, alienate them from positive social influences, and
increase the likelihood that they will contract AIDS or other drug-resistant diseases. 104 The
purported social or rehabilitative benefits of “get tough” sentencing measures are largely
nonexistent; excessively punitive criminal laws advantage only those in the private prison


Effective Rehabilitation Programs Decrease Recidivism Rates,

Impacting Private Prison Companies’ Revenue
In 2005, researchers Patrick Bayer and David Pozen found that in juvenile corrections
systems, “[r]elative to all other management types, for-profit management leads to a significant
increase in recidivism.” 105 The difference in quality among inmate rehabilitation programs in
public and private prisons illustrates yet another symptom of the divergent motivations affecting
public and private prison operators. 106 “A for-profit prison operator [has] almost no contractual
incentive to provide rehabilitation opportunities or educational or vocational training that might

See Thomas Orsagh & Jong-rong Chen, The Effect of Time Served on Recidivism: An Interdisciplinary Theory, 4
J. QUANTITATIVE CRIMINOLOGY 155, 161 (1988) (stating that for some offense classes, longer sentences lead to an
increase in recidivism).
Id. at 158 (“As the sentence becomes longer, expected legitimate earnings and employment
opportunities decrease because of the loss of contact with the job market, expected earnings and
employment in illegitimate activity increase . . . and the distaste or unwillingness to engage in 8 hours per
day, 5 days per week work activity increases as one becomes accustomed to the inactivity of prison life. All
of these effects enhance postprison criminal propensities.”).
See Darley, supra note 2, at 193.
Patrick Bayer & David E. Pozen, The Effectiveness of Juvenile Correctional Facilities: Public versus Private
Management, 48 J.L. & ECON. 549, 549 (2005).
Robbins, supra note 7, at 15 (“A private jail in Texas was investigated for diverting $700,000 from a
drug-treatment program, while inmates with substance-abuse problems received no treatment whatsoever.
In Minnesota a private facility neglected to establish a substance abuse treatment program even though the
contract required it. The nearby public prison, by contrast, provided its chemically dependent inmates with
full-day therapeutic sessions five times a week.”).

benefit inmates after release, except insofar as these services act to decrease the current cost of
confinement.” 107
Programs common to public facilities such as substance addiction treatment, vocational
education, and sentence credits for good behavior are largely nonexistent in private prisons. 108
Where private companies do establish rehabilitation programs, often as the result of contractual
requirements, they maintain a financial interest in ensuring that they are poorly administered. 109
Successful rehabilitation efforts would encourage private prison companies’ best “clients” to
leave early and to fail to return. Also, the costs of implementing and administering effective
programs would undercut a private prison’s immediate bottom line. 110
The findings of the Bayer and Pozen study demonstrate how private prison companies
encourage recidivism by actively neglecting or discouraging rehabilitative programs. Instead of
encouraging inmates to leave prison free of addiction, with quality vocational training, and a
desire to become productive citizens, the profit motive behind private prison companies seeks to
ensure that the inmate returns to prison as quickly as possible.


The Purported Short-Term Economic Benefits of Prison

Privatization Are Offset by Long-Term Economic Costs
Advocates of prison privatization argue that as a product of market competition and the
efficiency of the private sector, private prisons are cheaper to operate than their public
counterparts. 111 However, in a 1996 study, the General Accounting Office found that studies
comparing costs of private and public prisons “do not offer substantial evidence that savings

Bayer & Pozen, supra note 105, at 552.
See The Road to Reduced Recidivism—The Ground Privateers Fear to Tread, CORRECTIONS PROF., Mar. 24,
2000, at 8.
See Robbins, supra note 7, at 14–15.
See id. at 14 (“Private prisons have a double disincentive to aid in the rehabilitation of their charges: by skimping
on programs they save money immediately and, by letting prisoners serve out their terms without access to proper
rehabilitation programs, they increase the likelihood that those prisoners will become ‘repeat customers.’”).
See, e.g., MOORE & ROSE, supra note 11, at 15–17.

have occurred” under privatization contracts. 112 In 2005, it was found that the state of Arizona
actually paid private contractors $11 per prisoner per day more than the average daily costs of
state-operated prisons, totaling approximately $4.1 million in extra spending by the state per
year. 113
Aside from immediate financial concerns, lawmakers should consider the long-term
indirect financial costs that arise out of privatization arrangements. Increased criminal recidivism
among inmates in private institutions presents perhaps the largest hidden financial cost of
privatization. The Bayer and Pozen study comparing private and public juvenile facilities found
that a “cost-benefit analysis implies that the short-run savings offered by for-profit facilities over
nonprofit facilities are reversed in the long run due to increased recidivism rates.” 114 This
conclusion holds even when one ignores the noneconomic harms associated with high recidivism
rates and only accounts for direct financial costs. 115
Another indirect cost of privatization arises from compliance monitoring and
enforcement procedures that are necessary to ensure minimal compliance with contractual
requirements. Privatization advocates claim that a lack of redundant bureaucracy in private
prisons brings down their overall operating costs relative to public prisons. 116 However, rather
than reducing levels of red tape that would otherwise exist in a purely public system, private
prison systems require costly monitoring and enforcement procedures to keep the symptoms of
profit maximization in check as much as possible. This necessitates an additional layer of
bureaucracy and aggravates governments’ overall corrections expenditures. 117


See Private Prison Mandate Questioned in Arizona, CORRECTIONS PROF., Aug. 5, 2005, at 15.
Bayer & Pozen, supra note 105, at 582.
See generally id.
See MOORE & ROSE, supra note 11, at 5.
See Am. Fed’n of State, County & Municipal Employees (AFSCME), The Record—For-Profit Private Prisons
Do Not Provide Measurable Cost Savings, (last visited Aug. 23, 2009).

Finally, the costs associated with legal challenges stemming from the actions of private
prison employees aggravate contracting governments’ corrections budgets even further.
Although the Government enjoys qualified immunity 118 against lawsuits arising under 42 U.S.C.
§ 1983, the Supreme Court has held that this immunity does not extend to employees of private
prison companies. 119 Litigation expenses, settlement agreements, and adverse court judgments
against private prison operators and their employees augment the Government’s expenses by
way of contract pricing increases and a higher degree of liability exposure than would exist
under a purely public system. 120 These additional indirect financial costs seriously undermine
the economic argument in favor of private prison contracts and demonstrate why the
privatization “solution” has so far failed to ease governments’ corrections budgets.



Despite the social and economic costs associated with prison privatization, the Federal
Government and most states continue to outsource their prison administration responsibilities to
some degree. 121 As of early 2009, only Illinois and New York have barred private prisons by
statute. 122 Congress and all other states, including those that have not yet actively pursued


The Supreme Court has “accorded certain government officials either absolute or qualified immunity from suit if
the ‘tradition of immunity was so firmly rooted in the common law and was supported by . . . strong policy reasons .
. . .’” Wyatt v. Cole, 504 U.S. 158, 163–64 (1992) (quoting Owen v. City of Independence, 445 U.S. 622, 637
See Richardson v. McKnight, 521 U.S. 399, 399 (1997). But see Correctional Servs. Corp. v. Malesko, 534 U.S.
61, 61 (2001) (declining to extend availability of Bivens actions to private prison companies under contract with the
Federal Government).
See S. 842, 107th Cong. § 2(6) (2001) (“[Q]ualified immunity that shields State and local correctional officers
does not apply to private prison personnel, and therefore exposes State and local governments to liability for the
actions of private corporations.”); H.R. 1764, 107th Cong. § 2(6) (2001) (stating same).
See infra app. 1.
730 ILL. COMP. STAT. ANN 140/1 to 140/4 (West 2009); N.Y. CORRECT. LAW §§ 120–121 (McKinney 2009).

privatization but do not expressly forbid private prison contracts, should enact similar legislation
and thereby avoid the economic and social harms associated with privatization schemes.


Particularized Contract Terms and Aggressive Monitoring

Programs Are Inviable Alternative Solutions
Some commentators have proposed contract modification along with increased
compliance monitoring and enforcement as alternative solutions to a complete prohibition on
private prison contracts. 123 Along similar lines, it may be argued that more rigorous
accreditation standards by the American Correctional Association (ACA) would enhance
contractors’ performance and accountability. 124 Under these proposed solutions, private prisons
would ostensibly operate under the same standards applicable to public prisons while continuing
to supply the purported cost benefits of privatization. However, increasingly particularized
contract terms and aggressive monitoring or enforcement procedures cannot sufficiently abate
the symptoms of profit maximization in private prisons. 125 A rise in the quality or frequency of
performance monitoring visits would immediately increase costs, to either the Government or the
contractor (who would eventually pass that cost on to the Government by way of increased
contract pricing). 126 The degree of governmental oversight that would be necessary to ensure
that private prison companies actually adhere to demanding and particularized contract or
accreditation requirements would be so great as to increase costs to the point where neither the


See Jody Freeman, The Contracting State, 28 FLA. ST. U. L. REV. 155, 170–71 (2000) (“To some extent,
objections to contracting out might be ameliorated by careful attention to contract design. Contracts could specify
tasks more clearly, detail procedures more thoroughly, and clarify responsibilities.”).
See Laura A. Dickinson, Public Law Values in a Privatized World, 31 YALE J. INT’L L. 383, 414 (2006).
See Dolovich, supra note 9, at 492 (“Certainly, those contracts that provide for full-time on-site monitors are an
improvement over those that allow for only occasional visits: the average permanent on-site monitor spends an
average of 7.25 hours per day, working five days a week, in the monitored facility. But still, given the scope of
prison contracts and the range and extent of the interactions and activities within any given prison, it seems unlikely
that comprehensive and meaningful oversight can be achieved by a single monitor spending an average of thirty-six
hours a week on-site.”); Freeman, supra note 123, at 171 (“[T]here is a limit to technocratic solutions. No matter
how careful the [contract] drafter, some tasks are difficult to specify in contractual terms . . . .”).
See Dolovich, supra note 9, at 492–93.

Government nor the contractor would agree to such terms. 127 Because private enterprises must
turn a profit or shut down business, the Government cannot expect to save money by outsourcing
prison administration and also require their contractors to adhere to a high quality of prison
Increased costs aside, contractual noncompliance cannot be completely remedied by
aggressive governmental monitoring and oversight. Private prison companies have an incentive
and an ability to conceal information that reflects poorly on their contract performance. 128 These
companies are able to control access to information within the prisons they administer, and only
a constant and omniscient governmental presence within the prison walls could ensure that a
demanding contract’s performance standards are met. 129 Thus, given the overarching financial
motivations that impel the actions of private prison companies, the only way to avoid the
problems associated with corrections privatization is to prohibit prison administration contracts


Current Legislative Prohibitions on Government Contracts

with Private Prison Corporations
In 1990, Illinois lawmakers enacted the Private Correctional Facility Moratorium Act and
amended their state charter to prohibit contracts with private parties for the operation of state
prisons. 130 Likewise, in 2007, the State of New York passed Correction Law §§ 120–121, under


See id. at 477 n.147 (“Even assuming such contractual completeness is possible, it could also work to the states’
disadvantage. For instance, states could conceivably stipulate a minimum investment in the training and
remuneration of the prison labor force. Doing so, however, would increase the cost of the contracts considerably,
something cost-conscious state officials would wish to avoid.”).
See id. at 491–92.
See id. (“Given the enormity of the task of overseeing contractual performance under circumstances of ‘hidden
delivery’ in crowded and bustling institutions, it seems plain that systems under which monitors make only
occasional on-site visits are inadequate to the task—even assuming, as the data suggest, multiple monitors per
Illinois Private Correctional Facility Moratorium Act, 730 ILL. COMP. STAT. ANN. 140/1 to 140/4 (West 2009).

which the “private operation or management of a correctional facility . . . is prohibited.” 131
These statutory prohibitions effectively legitimized operation of the Illinois and New York penal
systems under due process requirements by ensuring that public, financially uninterested actors
perform the discretionary tasks associated with prison administration. 132
The effects of the Illinois and New York moratoriums refute private prison advocates’
claims that corrections budgets will suffer if governments regain control of their prisons. In 2006
and 2007, Illinois’s corrections expenditures as a percent of total state expenditures were below
the national average. 133 In 2007, soon after New York abolished private prison contracts, its
corrections budget was also below the national average.134 Indeed, the three states with the
highest percentages of corrections expenditures in 2007 were California, Florida, and
Michigan, 135 all of which authorize (and frequently utilize) private prisons. 136
The argument that privatization reduces the pressure on states’ corrections budgets is
disingenuous. Evidence indicates that reclaiming governmental authority over prisons that are
currently under private control will not require a drastic increase in governmental corrections
spending. To the contrary, abolishing private prisons will promote long-term cost savings by
virtue of corrections policies free from the influence of companies whose existence depends on a
continually expanding carceral state. 137


N.Y. CORRECT LAW § 121 (McKinney 2009); see also N.Y. State Sen. Michael Nozzolio press release, Aug. 1,
2007, available at
(quoting Senator Nozzolio: “Public safety should never be linked to private sector motives.”).
See infra Part III.
See STATE EXPENDITURE REPORT, supra note 1, at 57 (In 2006, while the national average of corrections
expenditures was 3.3% of state budgets, Illinois’ percentage was 2.6%; in 2007, when the national average was
3.4%, Illinois’s average was 2.9%).
See id. (New York’s corrections expenditures in 2007 constituted 3.0% of the total state budget, whereas the
national average was 3.4%).
See id. (noting that in 2007 Michigan spent 5.3% of its yearly budget on corrections, California spent 4.8%, and
Florida 4.4%, while the national average was 3.4%).
CAL. PENAL CODE § 6256 (West 2009); FLA. STAT. ANN. § 994.715(1) (West 2009); MICH. COMP. LAWS ANN. §
791.220g(5) (West 2009).
Given the divergent incentives between public and private corrections operators, removing private prison
companies from the criminal policy decision-making process will encourage corrections “downsizing,” whereas the
continued existence of the private prison industry will always promote industry “growth.”

There are many legal, moral, and policy arguments in support of a total prohibition on
private prisons. Oversight of inmate care and rehabilitation should be conducted only by
accountable government actors, and it is a clear violation of due process to abdicate that
responsibility to entities whose interests are opposed to the goals of effective prison
management. Private prison companies cannot be expected to adopt policies that would harm
their financial well-being, and it is impossible to draft (much less agree to) contract requirements
that could account for and control every act or decision that requires prison operators’ discretion
and judgment.
Thus, governments must regain complete authority over penal administration by way of
statutory prohibitions on contracts with private prison companies. Once they have reclaimed
their proper role in corrections administration, it will then be incumbent upon these governments
to address the policies that created the prison overcrowding crisis in the first place. Excluding
profit-driven interests from the realm of penal administration will legitimize the public debate
over the effectiveness and propriety of criminal laws, increasing the likelihood that sentencing
and corrections policies will be adopted with the interests of the public, and not of prison
companies, in mind.


States’ Statutes Regarding Contracts with Private Prison
Federal Government
District of Columbia

New Hampshire
New Jersey
New Mexico
New York
North Carolina

Private Prisons?
No statute
No statute
No statute
No statute
No statute
No statute
No statute

Authorizes private
youth facilities
No statute

Statute(s) & Relevant Text
No statute
No statute
ALASKA STAT. § 33.30.031 (2008)
ARIZ. REV. STAT. ANN. § 41-1609(B) (2008)
ARK. CODE ANN. § 12-50-106(a) (2008)
CAL. PENAL CODE § 6256 (West 2009)
COLO. REV. STAT. ANN. § 17-1-201(1) (West 2008)
CONN. GEN. STAT. ANN. § 18-86b(a) (West 2008)
No statute
D.C. CODE § 24-261.01(5) (2009)
FLA. STAT. ANN. § 994.715(1) (West 2009)
GA. CODE ANN. § 24-4-60(b) (2009)
HAW. REV. STAT. § 353-16.36 (2008)
IDAHO CODE ANN. § 20.209(2) (2008)
730 ILL. COMP. STAT. ANN. 140/1–140/4 (West 2009)
IND. CODE ANN. § 31-9-2-115(a) (West 2009)
No statute
KAN. STAT. ANN. § 75-52,133 (2008)
KY. REV. STAT. ANN. § 197.505(1) (West 2009)
LA. REV. STAT. ANN. § 39:1800.2 (2009)
No statute
No statute
See MASS GEN. LAWS ch. 7, § 52 (2009) (“The general court hereby finds and
declares that using private contractors to provide public services formerly provided
by state employees does not always promote the public interest[.]”)
MICH. COMP. LAWS ANN. § 791.220g(5) (West 2009)
MINN. STAT. ANN. § 241.021(a) (West 2008)
MISS. CODE ANN. § 47-4-1 (2008)
No statute
MONT. CODE ANN. § 53-30-601 (2008)
NEB. REV. STAT. § 47-802(1)–(2) (2009)
NEV. REV. STAT. § 209.141 (2009)
N.H. REV. STAT. ANN. § 21-H:8(VI) (2009)
N.J. STAT. ANN. §§ 30:4-91.9 (West 2009)
N.M. STAT. ANN. § 31-20-2(G) (West 2008)
N.Y. CORRECT. LAW §§ 120–121 (McKinney 2009)
N.C. GEN. STAT. ANN. § 148-37(c) (West 2009)

North Dakota
Rhode Island
South Carolina
South Dakota
West Virginia

No statute
No statute
No statute
No statute

N.D. CENT. CODE § 12-44.-02 (2009)
OHIO REV. CODE ANN. § 341.35 (West 2009)
OKLA. STAT. ANN. tit. 11, § 34-105(A) (West 2009)
No statute
61 PA. STAT. ANN. §§ 1082–1083 (West 2008)
No statute
No statute
S.D. CODIFIED LAWS § 24-11-39 (2009)
TENN. CODE ANN. § 41-24-103(a) (2009)
TEX. GOV’T CODE ANN. § 495.001(a) (Vernon 2009)
UTAH CODE ANN. § 64-13d-103(1) (2009)
No statute
VA. CODE ANN. § 53.1-262 (2009)
No statute
W. VA. CODE § 25-5-4(d) (2009)
WIS. STAT. ANN. § 301.08(1)(a) (West 2008)
WYO. STAT. ANN. § 7-22-102(a) (2009)